With COVID modelling in the news the relation between the two is interesting. in this post, Peter Klein, argues
"To understand why people shoot guns, on purpose or accidentally, we need to focus on their preferences, beliefs, and actions."He further links to Edith Penrose warned more than sixty years ago about the limits of biological analogies in understanding social issues. “The chief danger of carrying sweeping analogies very far is that the problems they are designed to illuminate become framed in such a special way that significant matters are frequently inadvertently obscured. Biological analogies contribute little either to the theory of price or to the theory of growth and development of firms and in general tend to confuse the nature of the important issues."
And the Penrose article is interesting. What is the relation between market competition and natural selection? Penrose discusses Alchian:
" To survive firms must make positive profits. Hence positive profits can be treated as the criterion of natural selection-the firms that make profits are selected or "adopted" by the environment, others are rejected and disappear. " Thus he argues also that even non-profit maximising firms will be forced to profit maximise.
I suspect this is an argument that a lot of economists will recognize and would relate to biology. But Penrose has read Darwin.
" Darwin deduced the struggle for existence from two empirical propositions:
a. all organisms tend to increase in a geometrical ratio, and
b. the numbers of any species remain more or less constant.
From this it follows that a struggle for existence must take place"
She relates that to economics
" Translated into economic terminology, the explanation of competition in nature is found in the rate of entry. The "excessive entry" is due to the nature of biological reproduction."
That is, in biology, the assumption of geometric increase means the entry of new "competitors". She continues:
" But how shall we explain competition in economic affairs where there is no biological reproduction? The psychological assumption of the traditional economic theory that businessmen like to make money and strive to make as much as is practicable performs a function in economic analysis similar to that of the physiological assumption in the biological theory of natural selection that the reproduction of organisms is of a geometric type-it provides the explanation of competition (and in economics, incidentally, also of monopoly). To be sure, the two assumptions rest on vastly different factual foundations and should not be treated as analogous. We can only say that there is some evidence that such a psychological motivation is widely prevalent and that we have found we can obtain useful results by assuming it. If we abandon this assumption, and particularly if we assume that men act randomly, we cannot explain competition, for there is nothing in the reproductive processes of firms that would ensure that more firms would constantly be created than can survive; and certainly from observations of the real world we can hardly assume that competition is so intense that zero profits will result in the long run or that only the best adapted firms can survive."
